§ 318. Disposition of on-track pari-mutuel pools; harness races. 1. Except as otherwise provided by law, every association or corporation authorized under this article to conduct pari-mutuel betting at a harness horse race meeting on races run thereat shall distribute all sums deposited in any pari-mutuel pool to the holders of winning tickets therein, provided such tickets be presented for payment prior to April first of the year following the year of their purchase, less an amount which shall be established and retained by such racing association or corporation of between fourteen and twenty per centum of the total deposits in pools resulting from regular bets, less sixteen to twenty-two per centum of the total deposits in pools resulting from multiple bets, less twenty to thirty per centum of the total deposits in pools resulting from exotic bets, and less twenty to thirty-six per centum of the total betting deposits in pools resulting from super exotic bets, plus the breaks. The retention rate to be established is subject to the prior approval of the racing and wagering board. Such rate may not be changed more than once per calendar quarter to be effective on the first day of the calendar quarter. "Exotic bets" and "multiple bets" shall have the meanings set forth in section five hundred nineteen of this chapter, "super exotic bets" shall have the meaning set forth in subdivision four of section three hundred one of this article and "the breaks" are hereby defined as the odd cents over any multiple of ten for regular and multiple bets, or for exotic bets, over any multiple of fifty, or for super exotic bets, over any multiple of one hundred calculated on the basis of one dollar and otherwise payable to a patron, provided however, that effective after October fifteenth, nineteen hundred ninety-four breaks are hereby defined as the odd cents over any multiple of five for payoffs greater than one dollar five cents but less than five dollars, over any multiple of ten for payoffs greater than five dollars but less than twenty-five dollars, over any multiple of twenty-five for payoffs greater than twenty-five dollars but less than two hundred fifty dollars, or over any multiple of fifty for payoffs over two hundred fifty dollars. a. Of the sum so retained from on-track pari-mutuel betting pools, such association or corporation authorized to operate in Westchester or Nassau county: (i) shall pay to the commissioner of taxation and finance as a reasonable tax for the privilege of conducting pari-mutuel betting at races run at race meetings held by such corporation or association, a tax, which is hereby levied, at the following rates: of total daily on-track pools resulting from regular bets, one and six-tenths per centum; of the total daily on-track pools resulting from multiple bets, one and thirty-five hundredths per centum; of total daily on-track pools resulting from exotic bets, four and eighty-five hundredths per centum; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, such tax shall be one-half of one per centum of all wagers. Such association or corporation shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one and one-half per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter; provided, however, that in no event shall total daily credit exceed one and one half per centum of the total daily pool of such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four, such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in noevent shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. An amount equal to fifty per centum of such credit shall be used to increase purses. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-half of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this chapter, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In the determination of the amounts expended for such enhancements, the board shall consider the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded notice and opportunity to be heard. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. (ii) except as otherwise provided in this paragraph an amount equal to six and eight-tenths per centum of the total pool resulting from on-track regular bets, an amount equal to seven and ninety-five one hundredths per centum of the total pool resulting from on-track multiple bets, an amount equal to ten and one-half per centum of the total pool resulting from on-track exotic bets, an amount equal to fifteen and one-half per centum of the total daily pool resulting from on-track super exotic bets shall be used exclusively for purses, of which an amount of not less than ninety per centum shall be used exclusively for purses for overnight races conducted by such association or corporation. Such amounts may be reduced upon an application approved by the board and an agreement between the licensed harness racing corporation or association and the representative horsemen's organization as a condition to reduce the amounts of retained percentages as provided for in this section. However, of the total amount available for purses, an amount as determined by contractual obligations between an organization representing at least fifty-one per centum of the owners and trainers utilizing the facilities of such association or corporation for racing, training or stabling purposes and the association or corporation, shall be used for the administrative purposes of said organization and for such welfare and medical plans for regularly employed backstretch employees principally employed at the facilities of such corporation or association as provided by said organization, provided, however, that eligibility for benefits in such plans shall not be conditioned upon membership in such organization by any employee or employer thereof, and any denial of eligibility for benefits in such plans which, upon investigation and review by the board, is determined to have resulted from a person, firm, association, corporation or organization knowingly aiding in or permitting eligibility for benefits being conditioned upon membership in such organization shall subject such organization to the penalties imposed under sections three hundred ten and three hundred twenty-one of this article but the ratio between the amounts actuallyexpended for such welfare and medical plans and the cost actually incurred in administering such welfare and medical plans for fiscal years of such corporation or association, on or after July twenty-fourth, nineteen hundred eighty-one, shall not be less than the ratio between such amounts actually expended and such costs actually incurred for the fiscal year immediately prior to such date. Such organization shall annually on or before July first certify to the state racing and wagering board that it represents at least fifty-one per centum of such owners and trainers and provide copies of such certification to such association or corporation. Any other organization claiming to represent at least fifty-one per centum of such owners and trainers may file a challenge with the state racing and wagering board within fifteen days of such original certification. The state racing and wagering board shall examine such claim and may undertake studies and conduct hearings to determine the validity of such claim. Within sixty days of receiving such challenge and based upon the findings of such studies and hearings, the state racing and wagering board shall render a decision on the validity of such claim and advise such organizations and association or corporation of its determination. Upon receipt of such original certification by such organization, the association or corporation shall make such payments to said organization and, in the event of a challenge brought to any other organization, such payments shall continue to be made until such time as the state racing and wagering board renders its decision on such challenge; and (iii) the balance of the retained percentage of such pools and the balance of the breaks may be held by such association or corporation for its own use and purposes except as provided in paragraph c of this subdivision and in subdivision four of section three hundred one of this article, provided, however, that the board shall report annually, on or before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in subparagraph (i) of this paragraph in accomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article and article ten of this chapter. b. (i) Of the sums retained by any other licensed harness racing association or corporation other than those described in paragraph a of this subdivision, the applicable tax rates for regular bets shall be six-tenths of one per centum; for multiple bets shall be one and one-tenth per centum; for exotic bets shall be five and six-tenths per centum and for super exotic bets shall be seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, for all licensed harness racing associations and corporations which have entered into a contract with their representative horsemen's association on and after such date, such taxshall be one-half of one per centum of all wagers, plus fifty per centum of the breaks. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-quarter of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this article, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In this regard, expenditures by a county agricultural society pursuant to section three hundred nineteen of this article shall be credited to the applicable harness racing association or corporation for this purpose. In the determination of the amounts expended for such enhancements, the board may consider the immediately preceding twelve month calendar period or the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded a notice and opportunity to be heard and no increase shall be imposed during nineteen hundred ninety-five on the authorized harness racing association conducting a special seven day harness race meeting that did not make such required expenditures during nineteen hundred ninety-four. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. Such associations or corporations shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter, provided however, that in no event shall the total daily credit exceed one per centum of the total daily pool of such association or corporation which tax is hereby levied and shall be paid to the commissioner of taxation and finance as a reasonable tax imposed by the state for the privilege of conducting pari-mutuel betting at races run at race meetings held by such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in no event shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. The racing and wagering board shall report annually, before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in this subparagraph inaccomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article. (ii) Of the sums retained by such association or corporation, an amount equal to one and three-quarters per centum of the total pool resulting from on-track regular, multiple and exotic bets shall be used exclusively for the purpose of increasing purses awarded in overnight races conducted by such association or corporation. Such amounts shall be in addition to purse moneys otherwise provided pursuant to existing contractual obligations. In this regard an amount equal to twelve per centum of the total bets in super exotic pools shall be used for purses in lieu of any such contractual obligations which might otherwise apply to purses to be awarded on super exotic bets. Any portion of such amount not so used during any year shall be so used during the following year, failing which such portion shall be payable to the commissioner of taxation and finance as additional tax. In addition to the amounts required in this paragraph, fifty percent of all additional sums retained, as a result of tax reductions provided in this section after September first, nineteen hundred ninety-four to qualified licensed harness racing associations, shall be used exclusively for purposes of increasing purses awarded in overnight races conducted by such association or corporation, provided that such association or corporation has entered into a written agreement with its representative horsemen's organization on and after September first, nineteen hundred ninety-four. Notwithstanding anything contained herein to the contrary, in a harness special betting district the amount to be used for purses or the methodology for calculating the amount to be used for purses may be specified in a written contract between a harness racing association or corporation and its representative horsemen's association. The balance of the retained percentage of such pool may be held by such corporation or association for its own use and purposes. (iii) Of the amount of the breaks from on-track regular, multiple, exotic and super exotic bets such association or corporation shall pay fifty per centum to commissioner of taxation and finance. The balance of such breaks may be held by such association or corporation for its own use and purposes. (iv) The state racing and wagering board shall as a condition of racing require an association authorized to operate in areas other than Westchester or Nassau county to withhold one percent of all purses and to pay such sum to the horsemen's organization representing the owners and trainers utilizing the facilities of such association which had a contract with the association governing the conditions of racing on January first, nineteen hundred ninety-two, as determined by the board. Any other horsemen's organization may apply to the board to be approved as the qualified organization to receive payment of the one percent of all purses by submitting to the board proof of both, that (i) it represents more than fifty-one percent of all the owners and trainers utilizing the same facilities and (ii) the horsemen's organization previously approved as qualified by the board does not represent fifty-one percent of all the owners and trainers utilizing the samefacilities. If the board is satisfied that the documentation submitted with the application of any other horsemen's organization is conclusive with respect to (i) and (ii) above, it may approve the applicant as the qualified recipient organization. In the best interests of racing, upon receipt of such an application, the board may direct the payments to the previously qualified horsemen's organization to continue uninterrupted, or it may direct the payments to be withheld and placed in interest-bearing accounts for a period not to exceed ninety days, during which time the board shall review and approve or disapprove the application. Funds held in such manner shall be paid to the organization approved by the board. In no event shall the board accept more than one such application in any calendar year from the same horsemen's organization. The funds authorized to be paid by the board are to be used exclusively for the benefit of those horsemen racing in New York state through the administrative purposes of such qualified organization, benevolent activities on behalf of backstretch employees, and for the promotion of equine research. c. Of the sums retained by any harness racing association or corporation, an amount equal to three-fifths of one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from on-track super exotic bets shall be paid to the agriculture and New York state horse breeding development fund, provided, however, that after April first, nineteen hundred eighty-six, the amount to be paid to the agriculture and New York state horse breeding development fund shall equal one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from super exotic bets. d. Every harness racing association or corporation shall pay to the board as a regulatory fee, which fee is hereby levied, fifty hundredths of one percent of the total daily on-track pari-mutuel pools of such association or corporation. 2. The state tax levied adjusted for any credits in this section shall be paid to the commissioner of taxation and finance, on the last business day of each month and shall cover taxes due for the period from the sixteenth day of the preceding month through the fifteenth day of the current month provided, however, that such payments required to be made on March thirty-first shall include all taxes due and accruing through the last full week of racing in March of the current year or as otherwise determined by the commissioner, and shall be accompanied by a report under oath showing the total of all such contributions together with such other information as the commissioner may require. A penalty of five percent and interest at the rate of one percent per month from the date the report is required to be filed to the date of payment of the tax shall be payable in case any tax imposed by this section is not paid when due. If the commissioner determines that any moneys received under this section were paid in error, the commissioner may cause the same to be refunded without interest out of any moneys collected thereunder, provided an application therefor is filed with it within one year from the time the erroneous payment was made. Such taxes, interest and penalties when collected, after the deduction of refunds of taxes erroneously paid, shall be paid by the commissioner into the general fund of the state treasury. 3. Except as otherwise provided by law no county, city, town, village or other political subdivision of the state may impose, levy or collect a tax on admission fees or tax on admission, on bets made by patrons in the form of purchases of pari-mutuel tickets or upon such tickets, onpari-mutuel pools, on breaks, on dividends or payments made to winning bettors, or on that part of the pari-mutuel pools or breaks to be retained by harness horse racing associations or corporations under this section. 4. Notwithstanding any other provisions of this chapter, there shall be no pari-mutuel tax imposed upon the compensation received by any harness racing association or corporation in consideration for (a) permission to have wagering conducted outside this state on races run by such association or corporation, and (b) the simulcasting outside this state of races run by such association or corporation, except for such permission or such simulcasting as may be granted to an off-track betting operator in the state of Connecticut by a harness racing association or corporation located in Nassau or Westchester county. Any such association or corporation so simulcasting to an off-track betting operator in the state of Connecticut shall pay to the New York commissioner of taxation and finance a reasonable tax for such permission and privilege for such simulcasting, which is hereby levied, at the following rates: one and one-tenth per centum of total daily regular and multiple bets; three and one-tenth per centum of total daily exotic bets; and three and one-half per centum of total daily super exotic bets. 5. Tax rates in event of failure to maintain pari-mutuel racing activity. a. Notwithstanding any other provision of this section to the contrary, for any calendar year commencing on or after January first, nineteen hundred eighty-nine, in which a harness racing association or corporation does not conduct a minimum number of pari-mutuel programs and pari-mutuel races at its facilities equal to at least ninety per centum of the programs and races so conducted during nineteen hundred eighty-five or during nineteen hundred eighty-six, whichever is less, in lieu of the tax rates set forth in subdivision one of this section the applicable pari-mutuel tax rates for such association or corporation with respect to on-track pari-mutuel betting pools during such year shall be as follows: (i) For such an association or corporation authorized to operate in Westchester or Nassau county: of total daily on-track pools resulting from regular bets, three and seventy-five hundredths per centum of the first five hundred thousand dollars comprising such pools and five and twenty-five hundredths per centum of the amount in excess of five hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, four and seventy-five hundredths per centum of the first three hundred thousand dollars comprising such pools and six and twenty-five hundredths per centum of the amount in excess of three hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, eight and seventy-five hundredths per centum of the first two hundred thousand dollars comprising such pools, and ten and twenty-five hundredths per centum of the amount in excess of two hundred thousand dollars, plus fifty per centum of the breaks; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks; and (ii) For any harness racing association or corporation other than one described in subparagraph (i) of this paragraph: of total daily on-track pools resulting from regular bets, one and one-half per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, two per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, six and one-half per centum, plus fifty per centum of the breaks; and of totaldaily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. b. The provisions of this subdivision shall not apply to an association or corporation for any calendar year for which the state racing and wagering board certifies to the commissioner of taxation and finance: (i) by December fifteenth of the year immediately preceding such year, that such association or corporation has been assigned for such year, from the programs and races it requested, at least the minimum number of programs and races prescribed in paragraph a of this subdivision, or, if fewer than such number were assigned for such year, that the assignment of such lesser number was for good cause due to factors beyond the control of such association or corporation or because the board found that it would be uneconomical or impractical for such association or corporation to be assigned the prescribed number; and (ii) by January thirty-first of the year immediately subsequent to such year, that such association or corporation did conduct such number of programs and races as were certified pursuant to subparagraph (i) of this paragraph, or if it failed to conduct such number that such failure was for good cause due to factors beyond its control or because the board found it uneconomical or impractical for such association or corporation to conduct such a number. c. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (i) of paragraph b of this subdivision with respect to an association or corporation, the tax imposed by this section shall be computed by substituting the provisions of paragraph a of this subdivision for the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section and shall pay the tax so computed to the commissioner of taxation and finance. In such computation and payment, all other provisions of this section shall apply as if the provisions of this paragraph and of paragraph a of this subdivision had been incorporated in whole in paragraph a or b, whichever is applicable, of subdivision one of this section. d. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (ii) of paragraph b of this subdivision with respect to an association or corporation, the tax required to be paid hereunder for such year shall be equal to the difference between the tax imposed pursuant to the provisions of paragraph a of this subdivision and the tax imposed pursuant to the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section, less one-half of such difference in recognition of purses which were required to be paid, plus an additional amount equal to ten per centum of such tax in the event of a willful failure to comply with the provisions of subparagraph (ii) of paragraph b of this subdivision and such association or corporation shall pay the tax so computed to the commissioner of taxation and finance on or before March fifteenth of the following year. Notwithstanding the provisions of this subdivision, in the event that upon appeal from the determination of the state racing and wagering board that the certification provided in paragraph b of this subdivision will not be made, it is finally determined that such board was erroneous in failing to so certify and that any moneys received by the commissioner of taxation and finance under paragraph c of this subdivision were paid in error, the same shall be refunded at the rate of interest of six percent per annum. Payment of such tax due, or the anticipation of such payment, shall not affect the determination of purses in the year in which such tax arises or in the year in which such payment is made nor shall such payment in any othermanner be considered in any statutory or contractural calculation of purse obligations. e. Written notice of the certification of the board pursuant to the provisions of paragraph b of this subdivision shall be given by the board to the appplicable association or corporation by the dates therein specified. In like manner, written notice that such certification will not be made shall be given by the board to the commissioner of taxation and finance and the applicable association or corporation by such dates.
§ 318. Disposition of on-track pari-mutuel pools; harness races. 1. Except as otherwise provided by law, every association or corporation authorized under this article to conduct pari-mutuel betting at a harness horse race meeting on races run thereat shall distribute all sums deposited in any pari-mutuel pool to the holders of winning tickets therein, provided such tickets be presented for payment prior to April first of the year following the year of their purchase, less an amount which shall be established and retained by such racing association or corporation of between fourteen and twenty per centum of the total deposits in pools resulting from regular bets, less sixteen to twenty-two per centum of the total deposits in pools resulting from multiple bets, less twenty to thirty per centum of the total deposits in pools resulting from exotic bets, and less twenty to thirty-six per centum of the total betting deposits in pools resulting from super exotic bets, plus the breaks. The retention rate to be established is subject to the prior approval of the racing and wagering board. Such rate may not be changed more than once per calendar quarter to be effective on the first day of the calendar quarter. "Exotic bets" and "multiple bets" shall have the meanings set forth in section five hundred nineteen of this chapter, "super exotic bets" shall have the meaning set forth in subdivision four of section three hundred one of this article and "the breaks" are hereby defined as the odd cents over any multiple of ten for regular and multiple bets, or for exotic bets, over any multiple of fifty, or for super exotic bets, over any multiple of one hundred calculated on the basis of one dollar and otherwise payable to a patron, provided however, that effective after October fifteenth, nineteen hundred ninety-four breaks are hereby defined as the odd cents over any multiple of five for payoffs greater than one dollar five cents but less than five dollars, over any multiple of ten for payoffs greater than five dollars but less than twenty-five dollars, over any multiple of twenty-five for payoffs greater than twenty-five dollars but less than two hundred fifty dollars, or over any multiple of fifty for payoffs over two hundred fifty dollars. a. Of the sum so retained from on-track pari-mutuel betting pools, such association or corporation authorized to operate in Westchester or Nassau county: (i) shall pay to the commissioner of taxation and finance as a reasonable tax for the privilege of conducting pari-mutuel betting at races run at race meetings held by such corporation or association, a tax, which is hereby levied, at the following rates: of total daily on-track pools resulting from regular bets, one and six-tenths per centum; of the total daily on-track pools resulting from multiple bets, one and thirty-five hundredths per centum; of total daily on-track pools resulting from exotic bets, four and eighty-five hundredths per centum; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, such tax shall be one-half of one per centum of all wagers. Such association or corporation shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one and one-half per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter; provided, however, that in no event shall total daily credit exceed one and one half per centum of the total daily pool of such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four, such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in noevent shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. An amount equal to fifty per centum of such credit shall be used to increase purses. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-half of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this chapter, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In the determination of the amounts expended for such enhancements, the board shall consider the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded notice and opportunity to be heard. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. (ii) except as otherwise provided in this paragraph an amount equal to six and eight-tenths per centum of the total pool resulting from on-track regular bets, an amount equal to seven and ninety-five one hundredths per centum of the total pool resulting from on-track multiple bets, an amount equal to ten and one-half per centum of the total pool resulting from on-track exotic bets, an amount equal to fifteen and one-half per centum of the total daily pool resulting from on-track super exotic bets shall be used exclusively for purses, of which an amount of not less than ninety per centum shall be used exclusively for purses for overnight races conducted by such association or corporation. Such amounts may be reduced upon an application approved by the board and an agreement between the licensed harness racing corporation or association and the representative horsemen's organization as a condition to reduce the amounts of retained percentages as provided for in this section. However, of the total amount available for purses, an amount as determined by contractual obligations between an organization representing at least fifty-one per centum of the owners and trainers utilizing the facilities of such association or corporation for racing, training or stabling purposes and the association or corporation, shall be used for the administrative purposes of said organization and for such welfare and medical plans for regularly employed backstretch employees principally employed at the facilities of such corporation or association as provided by said organization, provided, however, that eligibility for benefits in such plans shall not be conditioned upon membership in such organization by any employee or employer thereof, and any denial of eligibility for benefits in such plans which, upon investigation and review by the board, is determined to have resulted from a person, firm, association, corporation or organization knowingly aiding in or permitting eligibility for benefits being conditioned upon membership in such organization shall subject such organization to the penalties imposed under sections three hundred ten and three hundred twenty-one of this article but the ratio between the amounts actuallyexpended for such welfare and medical plans and the cost actually incurred in administering such welfare and medical plans for fiscal years of such corporation or association, on or after July twenty-fourth, nineteen hundred eighty-one, shall not be less than the ratio between such amounts actually expended and such costs actually incurred for the fiscal year immediately prior to such date. Such organization shall annually on or before July first certify to the state racing and wagering board that it represents at least fifty-one per centum of such owners and trainers and provide copies of such certification to such association or corporation. Any other organization claiming to represent at least fifty-one per centum of such owners and trainers may file a challenge with the state racing and wagering board within fifteen days of such original certification. The state racing and wagering board shall examine such claim and may undertake studies and conduct hearings to determine the validity of such claim. Within sixty days of receiving such challenge and based upon the findings of such studies and hearings, the state racing and wagering board shall render a decision on the validity of such claim and advise such organizations and association or corporation of its determination. Upon receipt of such original certification by such organization, the association or corporation shall make such payments to said organization and, in the event of a challenge brought to any other organization, such payments shall continue to be made until such time as the state racing and wagering board renders its decision on such challenge; and (iii) the balance of the retained percentage of such pools and the balance of the breaks may be held by such association or corporation for its own use and purposes except as provided in paragraph c of this subdivision and in subdivision four of section three hundred one of this article, provided, however, that the board shall report annually, on or before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in subparagraph (i) of this paragraph in accomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article and article ten of this chapter. b. (i) Of the sums retained by any other licensed harness racing association or corporation other than those described in paragraph a of this subdivision, the applicable tax rates for regular bets shall be six-tenths of one per centum; for multiple bets shall be one and one-tenth per centum; for exotic bets shall be five and six-tenths per centum and for super exotic bets shall be seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, for all licensed harness racing associations and corporations which have entered into a contract with their representative horsemen's association on and after such date, such taxshall be one-half of one per centum of all wagers, plus fifty per centum of the breaks. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-quarter of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this article, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In this regard, expenditures by a county agricultural society pursuant to section three hundred nineteen of this article shall be credited to the applicable harness racing association or corporation for this purpose. In the determination of the amounts expended for such enhancements, the board may consider the immediately preceding twelve month calendar period or the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded a notice and opportunity to be heard and no increase shall be imposed during nineteen hundred ninety-five on the authorized harness racing association conducting a special seven day harness race meeting that did not make such required expenditures during nineteen hundred ninety-four. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. Such associations or corporations shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter, provided however, that in no event shall the total daily credit exceed one per centum of the total daily pool of such association or corporation which tax is hereby levied and shall be paid to the commissioner of taxation and finance as a reasonable tax imposed by the state for the privilege of conducting pari-mutuel betting at races run at race meetings held by such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in no event shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. The racing and wagering board shall report annually, before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in this subparagraph inaccomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article. (ii) Of the sums retained by such association or corporation, an amount equal to one and three-quarters per centum of the total pool resulting from on-track regular, multiple and exotic bets shall be used exclusively for the purpose of increasing purses awarded in overnight races conducted by such association or corporation. Such amounts shall be in addition to purse moneys otherwise provided pursuant to existing contractual obligations. In this regard an amount equal to twelve per centum of the total bets in super exotic pools shall be used for purses in lieu of any such contractual obligations which might otherwise apply to purses to be awarded on super exotic bets. Any portion of such amount not so used during any year shall be so used during the following year, failing which such portion shall be payable to the commissioner of taxation and finance as additional tax. In addition to the amounts required in this paragraph, fifty percent of all additional sums retained, as a result of tax reductions provided in this section after September first, nineteen hundred ninety-four to qualified licensed harness racing associations, shall be used exclusively for purposes of increasing purses awarded in overnight races conducted by such association or corporation, provided that such association or corporation has entered into a written agreement with its representative horsemen's organization on and after September first, nineteen hundred ninety-four. Notwithstanding anything contained herein to the contrary, in a harness special betting district the amount to be used for purses or the methodology for calculating the amount to be used for purses may be specified in a written contract between a harness racing association or corporation and its representative horsemen's association. The balance of the retained percentage of such pool may be held by such corporation or association for its own use and purposes. (iii) Of the amount of the breaks from on-track regular, multiple, exotic and super exotic bets such association or corporation shall pay fifty per centum to commissioner of taxation and finance. The balance of such breaks may be held by such association or corporation for its own use and purposes. (iv) The state racing and wagering board shall as a condition of racing require an association authorized to operate in areas other than Westchester or Nassau county to withhold one percent of all purses and to pay such sum to the horsemen's organization representing the owners and trainers utilizing the facilities of such association which had a contract with the association governing the conditions of racing on January first, nineteen hundred ninety-two, as determined by the board. Any other horsemen's organization may apply to the board to be approved as the qualified organization to receive payment of the one percent of all purses by submitting to the board proof of both, that (i) it represents more than fifty-one percent of all the owners and trainers utilizing the same facilities and (ii) the horsemen's organization previously approved as qualified by the board does not represent fifty-one percent of all the owners and trainers utilizing the samefacilities. If the board is satisfied that the documentation submitted with the application of any other horsemen's organization is conclusive with respect to (i) and (ii) above, it may approve the applicant as the qualified recipient organization. In the best interests of racing, upon receipt of such an application, the board may direct the payments to the previously qualified horsemen's organization to continue uninterrupted, or it may direct the payments to be withheld and placed in interest-bearing accounts for a period not to exceed ninety days, during which time the board shall review and approve or disapprove the application. Funds held in such manner shall be paid to the organization approved by the board. In no event shall the board accept more than one such application in any calendar year from the same horsemen's organization. The funds authorized to be paid by the board are to be used exclusively for the benefit of those horsemen racing in New York state through the administrative purposes of such qualified organization, benevolent activities on behalf of backstretch employees, and for the promotion of equine research. c. Of the sums retained by any harness racing association or corporation, an amount equal to three-fifths of one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from on-track super exotic bets shall be paid to the agriculture and New York state horse breeding development fund, provided, however, that after April first, nineteen hundred eighty-six, the amount to be paid to the agriculture and New York state horse breeding development fund shall equal one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from super exotic bets. d. Every harness racing association or corporation shall pay to the board as a regulatory fee, which fee is hereby levied, fifty hundredths of one percent of the total daily on-track pari-mutuel pools of such association or corporation. 2. The state tax levied adjusted for any credits in this section shall be paid to the commissioner of taxation and finance, on the last business day of each month and shall cover taxes due for the period from the sixteenth day of the preceding month through the fifteenth day of the current month provided, however, that such payments required to be made on March thirty-first shall include all taxes due and accruing through the last full week of racing in March of the current year or as otherwise determined by the commissioner, and shall be accompanied by a report under oath showing the total of all such contributions together with such other information as the commissioner may require. A penalty of five percent and interest at the rate of one percent per month from the date the report is required to be filed to the date of payment of the tax shall be payable in case any tax imposed by this section is not paid when due. If the commissioner determines that any moneys received under this section were paid in error, the commissioner may cause the same to be refunded without interest out of any moneys collected thereunder, provided an application therefor is filed with it within one year from the time the erroneous payment was made. Such taxes, interest and penalties when collected, after the deduction of refunds of taxes erroneously paid, shall be paid by the commissioner into the general fund of the state treasury. 3. Except as otherwise provided by law no county, city, town, village or other political subdivision of the state may impose, levy or collect a tax on admission fees or tax on admission, on bets made by patrons in the form of purchases of pari-mutuel tickets or upon such tickets, onpari-mutuel pools, on breaks, on dividends or payments made to winning bettors, or on that part of the pari-mutuel pools or breaks to be retained by harness horse racing associations or corporations under this section. 4. Notwithstanding any other provisions of this chapter, there shall be no pari-mutuel tax imposed upon the compensation received by any harness racing association or corporation in consideration for (a) permission to have wagering conducted outside this state on races run by such association or corporation, and (b) the simulcasting outside this state of races run by such association or corporation, except for such permission or such simulcasting as may be granted to an off-track betting operator in the state of Connecticut by a harness racing association or corporation located in Nassau or Westchester county. Any such association or corporation so simulcasting to an off-track betting operator in the state of Connecticut shall pay to the New York commissioner of taxation and finance a reasonable tax for such permission and privilege for such simulcasting, which is hereby levied, at the following rates: one and one-tenth per centum of total daily regular and multiple bets; three and one-tenth per centum of total daily exotic bets; and three and one-half per centum of total daily super exotic bets. 5. Tax rates in event of failure to maintain pari-mutuel racing activity. a. Notwithstanding any other provision of this section to the contrary, for any calendar year commencing on or after January first, nineteen hundred eighty-nine, in which a harness racing association or corporation does not conduct a minimum number of pari-mutuel programs and pari-mutuel races at its facilities equal to at least ninety per centum of the programs and races so conducted during nineteen hundred eighty-five or during nineteen hundred eighty-six, whichever is less, in lieu of the tax rates set forth in subdivision one of this section the applicable pari-mutuel tax rates for such association or corporation with respect to on-track pari-mutuel betting pools during such year shall be as follows: (i) For such an association or corporation authorized to operate in Westchester or Nassau county: of total daily on-track pools resulting from regular bets, three and seventy-five hundredths per centum of the first five hundred thousand dollars comprising such pools and five and twenty-five hundredths per centum of the amount in excess of five hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, four and seventy-five hundredths per centum of the first three hundred thousand dollars comprising such pools and six and twenty-five hundredths per centum of the amount in excess of three hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, eight and seventy-five hundredths per centum of the first two hundred thousand dollars comprising such pools, and ten and twenty-five hundredths per centum of the amount in excess of two hundred thousand dollars, plus fifty per centum of the breaks; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks; and (ii) For any harness racing association or corporation other than one described in subparagraph (i) of this paragraph: of total daily on-track pools resulting from regular bets, one and one-half per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, two per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, six and one-half per centum, plus fifty per centum of the breaks; and of totaldaily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. b. The provisions of this subdivision shall not apply to an association or corporation for any calendar year for which the state racing and wagering board certifies to the commissioner of taxation and finance: (i) by December fifteenth of the year immediately preceding such year, that such association or corporation has been assigned for such year, from the programs and races it requested, at least the minimum number of programs and races prescribed in paragraph a of this subdivision, or, if fewer than such number were assigned for such year, that the assignment of such lesser number was for good cause due to factors beyond the control of such association or corporation or because the board found that it would be uneconomical or impractical for such association or corporation to be assigned the prescribed number; and (ii) by January thirty-first of the year immediately subsequent to such year, that such association or corporation did conduct such number of programs and races as were certified pursuant to subparagraph (i) of this paragraph, or if it failed to conduct such number that such failure was for good cause due to factors beyond its control or because the board found it uneconomical or impractical for such association or corporation to conduct such a number. c. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (i) of paragraph b of this subdivision with respect to an association or corporation, the tax imposed by this section shall be computed by substituting the provisions of paragraph a of this subdivision for the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section and shall pay the tax so computed to the commissioner of taxation and finance. In such computation and payment, all other provisions of this section shall apply as if the provisions of this paragraph and of paragraph a of this subdivision had been incorporated in whole in paragraph a or b, whichever is applicable, of subdivision one of this section. d. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (ii) of paragraph b of this subdivision with respect to an association or corporation, the tax required to be paid hereunder for such year shall be equal to the difference between the tax imposed pursuant to the provisions of paragraph a of this subdivision and the tax imposed pursuant to the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section, less one-half of such difference in recognition of purses which were required to be paid, plus an additional amount equal to ten per centum of such tax in the event of a willful failure to comply with the provisions of subparagraph (ii) of paragraph b of this subdivision and such association or corporation shall pay the tax so computed to the commissioner of taxation and finance on or before March fifteenth of the following year. Notwithstanding the provisions of this subdivision, in the event that upon appeal from the determination of the state racing and wagering board that the certification provided in paragraph b of this subdivision will not be made, it is finally determined that such board was erroneous in failing to so certify and that any moneys received by the commissioner of taxation and finance under paragraph c of this subdivision were paid in error, the same shall be refunded at the rate of interest of six percent per annum. Payment of such tax due, or the anticipation of such payment, shall not affect the determination of purses in the year in which such tax arises or in the year in which such payment is made nor shall such payment in any othermanner be considered in any statutory or contractural calculation of purse obligations. e. Written notice of the certification of the board pursuant to the provisions of paragraph b of this subdivision shall be given by the board to the appplicable association or corporation by the dates therein specified. In like manner, written notice that such certification will not be made shall be given by the board to the commissioner of taxation and finance and the applicable association or corporation by such dates.
§ 318. Disposition of on-track pari-mutuel pools; harness races. 1. Except as otherwise provided by law, every association or corporation authorized under this article to conduct pari-mutuel betting at a harness horse race meeting on races run thereat shall distribute all sums deposited in any pari-mutuel pool to the holders of winning tickets therein, provided such tickets be presented for payment prior to April first of the year following the year of their purchase, less an amount which shall be established and retained by such racing association or corporation of between fourteen and twenty per centum of the total deposits in pools resulting from regular bets, less sixteen to twenty-two per centum of the total deposits in pools resulting from multiple bets, less twenty to thirty per centum of the total deposits in pools resulting from exotic bets, and less twenty to thirty-six per centum of the total betting deposits in pools resulting from super exotic bets, plus the breaks. The retention rate to be established is subject to the prior approval of the racing and wagering board. Such rate may not be changed more than once per calendar quarter to be effective on the first day of the calendar quarter. "Exotic bets" and "multiple bets" shall have the meanings set forth in section five hundred nineteen of this chapter, "super exotic bets" shall have the meaning set forth in subdivision four of section three hundred one of this article and "the breaks" are hereby defined as the odd cents over any multiple of ten for regular and multiple bets, or for exotic bets, over any multiple of fifty, or for super exotic bets, over any multiple of one hundred calculated on the basis of one dollar and otherwise payable to a patron, provided however, that effective after October fifteenth, nineteen hundred ninety-four breaks are hereby defined as the odd cents over any multiple of five for payoffs greater than one dollar five cents but less than five dollars, over any multiple of ten for payoffs greater than five dollars but less than twenty-five dollars, over any multiple of twenty-five for payoffs greater than twenty-five dollars but less than two hundred fifty dollars, or over any multiple of fifty for payoffs over two hundred fifty dollars. a. Of the sum so retained from on-track pari-mutuel betting pools, such association or corporation authorized to operate in Westchester or Nassau county: (i) shall pay to the commissioner of taxation and finance as a reasonable tax for the privilege of conducting pari-mutuel betting at races run at race meetings held by such corporation or association, a tax, which is hereby levied, at the following rates: of total daily on-track pools resulting from regular bets, one and six-tenths per centum; of the total daily on-track pools resulting from multiple bets, one and thirty-five hundredths per centum; of total daily on-track pools resulting from exotic bets, four and eighty-five hundredths per centum; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, such tax shall be one-half of one per centum of all wagers. Such association or corporation shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one and one-half per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter; provided, however, that in no event shall total daily credit exceed one and one half per centum of the total daily pool of such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four, such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in noevent shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. An amount equal to fifty per centum of such credit shall be used to increase purses. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-half of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this chapter, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In the determination of the amounts expended for such enhancements, the board shall consider the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded notice and opportunity to be heard. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. (ii) except as otherwise provided in this paragraph an amount equal to six and eight-tenths per centum of the total pool resulting from on-track regular bets, an amount equal to seven and ninety-five one hundredths per centum of the total pool resulting from on-track multiple bets, an amount equal to ten and one-half per centum of the total pool resulting from on-track exotic bets, an amount equal to fifteen and one-half per centum of the total daily pool resulting from on-track super exotic bets shall be used exclusively for purses, of which an amount of not less than ninety per centum shall be used exclusively for purses for overnight races conducted by such association or corporation. Such amounts may be reduced upon an application approved by the board and an agreement between the licensed harness racing corporation or association and the representative horsemen's organization as a condition to reduce the amounts of retained percentages as provided for in this section. However, of the total amount available for purses, an amount as determined by contractual obligations between an organization representing at least fifty-one per centum of the owners and trainers utilizing the facilities of such association or corporation for racing, training or stabling purposes and the association or corporation, shall be used for the administrative purposes of said organization and for such welfare and medical plans for regularly employed backstretch employees principally employed at the facilities of such corporation or association as provided by said organization, provided, however, that eligibility for benefits in such plans shall not be conditioned upon membership in such organization by any employee or employer thereof, and any denial of eligibility for benefits in such plans which, upon investigation and review by the board, is determined to have resulted from a person, firm, association, corporation or organization knowingly aiding in or permitting eligibility for benefits being conditioned upon membership in such organization shall subject such organization to the penalties imposed under sections three hundred ten and three hundred twenty-one of this article but the ratio between the amounts actuallyexpended for such welfare and medical plans and the cost actually incurred in administering such welfare and medical plans for fiscal years of such corporation or association, on or after July twenty-fourth, nineteen hundred eighty-one, shall not be less than the ratio between such amounts actually expended and such costs actually incurred for the fiscal year immediately prior to such date. Such organization shall annually on or before July first certify to the state racing and wagering board that it represents at least fifty-one per centum of such owners and trainers and provide copies of such certification to such association or corporation. Any other organization claiming to represent at least fifty-one per centum of such owners and trainers may file a challenge with the state racing and wagering board within fifteen days of such original certification. The state racing and wagering board shall examine such claim and may undertake studies and conduct hearings to determine the validity of such claim. Within sixty days of receiving such challenge and based upon the findings of such studies and hearings, the state racing and wagering board shall render a decision on the validity of such claim and advise such organizations and association or corporation of its determination. Upon receipt of such original certification by such organization, the association or corporation shall make such payments to said organization and, in the event of a challenge brought to any other organization, such payments shall continue to be made until such time as the state racing and wagering board renders its decision on such challenge; and (iii) the balance of the retained percentage of such pools and the balance of the breaks may be held by such association or corporation for its own use and purposes except as provided in paragraph c of this subdivision and in subdivision four of section three hundred one of this article, provided, however, that the board shall report annually, on or before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in subparagraph (i) of this paragraph in accomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article and article ten of this chapter. b. (i) Of the sums retained by any other licensed harness racing association or corporation other than those described in paragraph a of this subdivision, the applicable tax rates for regular bets shall be six-tenths of one per centum; for multiple bets shall be one and one-tenth per centum; for exotic bets shall be five and six-tenths per centum and for super exotic bets shall be seven per centum, plus fifty per centum of the breaks. Effective September first, nineteen hundred ninety-four, for all licensed harness racing associations and corporations which have entered into a contract with their representative horsemen's association on and after such date, such taxshall be one-half of one per centum of all wagers, plus fifty per centum of the breaks. Provided, however, that for any twelve month period beginning on April first in nineteen hundred ninety and any year thereafter, each of the applicable rates set forth above shall be increased by one-quarter of one per centum on all on-track bets of any such racing association or corporation that did not expend an amount equal to at least one-half of one per centum of its on-track bets during the immediately preceding calendar year for enhancements consisting of capital improvements as defined by section three hundred nineteen of this article, repairs to its physical plant, structures, and equipment used in its racing or wagering operations, as certified by the state racing and wagering board to the commissioner of taxation and finance no later than eighty days after the close of such calendar year, and five special events at each track in each calendar year, not otherwise conducted in the ordinary course of business, the purpose of which shall be to encourage, attract and promote track attendance and encourage new and continued patronage, which events shall be approved by the racing and wagering board for purposes of this subdivision. In this regard, expenditures by a county agricultural society pursuant to section three hundred nineteen of this article shall be credited to the applicable harness racing association or corporation for this purpose. In the determination of the amounts expended for such enhancements, the board may consider the immediately preceding twelve month calendar period or the average of the two immediately preceding twelve month calendar periods. Notwithstanding the foregoing no increase shall be imposed unless such corporation or association has been afforded a notice and opportunity to be heard and no increase shall be imposed during nineteen hundred ninety-five on the authorized harness racing association conducting a special seven day harness race meeting that did not make such required expenditures during nineteen hundred ninety-four. The racing and wagering board shall promulgate rules and regulations to implement the provisions relating to notice and hearing. Such associations or corporations shall receive credit as a reduction of the daily tax by the state for the privilege of conducting pari-mutuel betting of amounts equal to one per centum of total daily pools resulting from the simulcast of such association's or corporation's races to licensed facilities operated by regional off-track betting corporations in accordance with section one thousand eight of this chapter, provided however, that in no event shall the total daily credit exceed one per centum of the total daily pool of such association or corporation which tax is hereby levied and shall be paid to the commissioner of taxation and finance as a reasonable tax imposed by the state for the privilege of conducting pari-mutuel betting at races run at race meetings held by such association or corporation. Provided, however, that on and after September first, nineteen hundred ninety-four such credit shall be four-tenths percent of total daily pools resulting from such simulcasting and that in no event shall such total daily credit exceed four-tenths percent of the total daily pool of such association or corporation. The racing and wagering board shall report annually, before July first, to the director of the budget, the chairman of the senate finance committee and the chairman of the assembly ways and means committee the extent to which such corporations and associations utilized such retained percentages and breakage for operations, maintenance, capital improvements, advertising and promotion, administration and general overhead and evaluate the effectiveness and make recommendations with respect to the application of the reduced rates of taxation as provided for in this subparagraph inaccomplishing the objectives stated therein. Such report shall also specify the amounts of such retained percentages and breakage used for investments not directly related to racing activities and such amounts used to declare dividends or other profit distributions, additions to capital stock, its sale and transfer and additions to retained earnings. Such reports shall also include an analysis of any such agreements or proposals to conduct or otherwise expand wagers authorized under article ten of this chapter and present its conclusions with respect to the conduct of such wagering, the nature of such proposals and agreements, and recommendations to ensure the future maintenance of the intent of this article. (ii) Of the sums retained by such association or corporation, an amount equal to one and three-quarters per centum of the total pool resulting from on-track regular, multiple and exotic bets shall be used exclusively for the purpose of increasing purses awarded in overnight races conducted by such association or corporation. Such amounts shall be in addition to purse moneys otherwise provided pursuant to existing contractual obligations. In this regard an amount equal to twelve per centum of the total bets in super exotic pools shall be used for purses in lieu of any such contractual obligations which might otherwise apply to purses to be awarded on super exotic bets. Any portion of such amount not so used during any year shall be so used during the following year, failing which such portion shall be payable to the commissioner of taxation and finance as additional tax. In addition to the amounts required in this paragraph, fifty percent of all additional sums retained, as a result of tax reductions provided in this section after September first, nineteen hundred ninety-four to qualified licensed harness racing associations, shall be used exclusively for purposes of increasing purses awarded in overnight races conducted by such association or corporation, provided that such association or corporation has entered into a written agreement with its representative horsemen's organization on and after September first, nineteen hundred ninety-four. Notwithstanding anything contained herein to the contrary, in a harness special betting district the amount to be used for purses or the methodology for calculating the amount to be used for purses may be specified in a written contract between a harness racing association or corporation and its representative horsemen's association. The balance of the retained percentage of such pool may be held by such corporation or association for its own use and purposes. (iii) Of the amount of the breaks from on-track regular, multiple, exotic and super exotic bets such association or corporation shall pay fifty per centum to commissioner of taxation and finance. The balance of such breaks may be held by such association or corporation for its own use and purposes. (iv) The state racing and wagering board shall as a condition of racing require an association authorized to operate in areas other than Westchester or Nassau county to withhold one percent of all purses and to pay such sum to the horsemen's organization representing the owners and trainers utilizing the facilities of such association which had a contract with the association governing the conditions of racing on January first, nineteen hundred ninety-two, as determined by the board. Any other horsemen's organization may apply to the board to be approved as the qualified organization to receive payment of the one percent of all purses by submitting to the board proof of both, that (i) it represents more than fifty-one percent of all the owners and trainers utilizing the same facilities and (ii) the horsemen's organization previously approved as qualified by the board does not represent fifty-one percent of all the owners and trainers utilizing the samefacilities. If the board is satisfied that the documentation submitted with the application of any other horsemen's organization is conclusive with respect to (i) and (ii) above, it may approve the applicant as the qualified recipient organization. In the best interests of racing, upon receipt of such an application, the board may direct the payments to the previously qualified horsemen's organization to continue uninterrupted, or it may direct the payments to be withheld and placed in interest-bearing accounts for a period not to exceed ninety days, during which time the board shall review and approve or disapprove the application. Funds held in such manner shall be paid to the organization approved by the board. In no event shall the board accept more than one such application in any calendar year from the same horsemen's organization. The funds authorized to be paid by the board are to be used exclusively for the benefit of those horsemen racing in New York state through the administrative purposes of such qualified organization, benevolent activities on behalf of backstretch employees, and for the promotion of equine research. c. Of the sums retained by any harness racing association or corporation, an amount equal to three-fifths of one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from on-track super exotic bets shall be paid to the agriculture and New York state horse breeding development fund, provided, however, that after April first, nineteen hundred eighty-six, the amount to be paid to the agriculture and New York state horse breeding development fund shall equal one per centum of the total pools resulting from on-track regular, multiple and exotic bets and an amount equal to three per centum of the total pools resulting from super exotic bets. d. Every harness racing association or corporation shall pay to the board as a regulatory fee, which fee is hereby levied, fifty hundredths of one percent of the total daily on-track pari-mutuel pools of such association or corporation. 2. The state tax levied adjusted for any credits in this section shall be paid to the commissioner of taxation and finance, on the last business day of each month and shall cover taxes due for the period from the sixteenth day of the preceding month through the fifteenth day of the current month provided, however, that such payments required to be made on March thirty-first shall include all taxes due and accruing through the last full week of racing in March of the current year or as otherwise determined by the commissioner, and shall be accompanied by a report under oath showing the total of all such contributions together with such other information as the commissioner may require. A penalty of five percent and interest at the rate of one percent per month from the date the report is required to be filed to the date of payment of the tax shall be payable in case any tax imposed by this section is not paid when due. If the commissioner determines that any moneys received under this section were paid in error, the commissioner may cause the same to be refunded without interest out of any moneys collected thereunder, provided an application therefor is filed with it within one year from the time the erroneous payment was made. Such taxes, interest and penalties when collected, after the deduction of refunds of taxes erroneously paid, shall be paid by the commissioner into the general fund of the state treasury. 3. Except as otherwise provided by law no county, city, town, village or other political subdivision of the state may impose, levy or collect a tax on admission fees or tax on admission, on bets made by patrons in the form of purchases of pari-mutuel tickets or upon such tickets, onpari-mutuel pools, on breaks, on dividends or payments made to winning bettors, or on that part of the pari-mutuel pools or breaks to be retained by harness horse racing associations or corporations under this section. 4. Notwithstanding any other provisions of this chapter, there shall be no pari-mutuel tax imposed upon the compensation received by any harness racing association or corporation in consideration for (a) permission to have wagering conducted outside this state on races run by such association or corporation, and (b) the simulcasting outside this state of races run by such association or corporation, except for such permission or such simulcasting as may be granted to an off-track betting operator in the state of Connecticut by a harness racing association or corporation located in Nassau or Westchester county. Any such association or corporation so simulcasting to an off-track betting operator in the state of Connecticut shall pay to the New York commissioner of taxation and finance a reasonable tax for such permission and privilege for such simulcasting, which is hereby levied, at the following rates: one and one-tenth per centum of total daily regular and multiple bets; three and one-tenth per centum of total daily exotic bets; and three and one-half per centum of total daily super exotic bets. 5. Tax rates in event of failure to maintain pari-mutuel racing activity. a. Notwithstanding any other provision of this section to the contrary, for any calendar year commencing on or after January first, nineteen hundred eighty-nine, in which a harness racing association or corporation does not conduct a minimum number of pari-mutuel programs and pari-mutuel races at its facilities equal to at least ninety per centum of the programs and races so conducted during nineteen hundred eighty-five or during nineteen hundred eighty-six, whichever is less, in lieu of the tax rates set forth in subdivision one of this section the applicable pari-mutuel tax rates for such association or corporation with respect to on-track pari-mutuel betting pools during such year shall be as follows: (i) For such an association or corporation authorized to operate in Westchester or Nassau county: of total daily on-track pools resulting from regular bets, three and seventy-five hundredths per centum of the first five hundred thousand dollars comprising such pools and five and twenty-five hundredths per centum of the amount in excess of five hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, four and seventy-five hundredths per centum of the first three hundred thousand dollars comprising such pools and six and twenty-five hundredths per centum of the amount in excess of three hundred thousand dollars, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, eight and seventy-five hundredths per centum of the first two hundred thousand dollars comprising such pools, and ten and twenty-five hundredths per centum of the amount in excess of two hundred thousand dollars, plus fifty per centum of the breaks; and of total daily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks; and (ii) For any harness racing association or corporation other than one described in subparagraph (i) of this paragraph: of total daily on-track pools resulting from regular bets, one and one-half per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from multiple bets, two per centum, plus fifty per centum of the breaks; of total daily on-track pools resulting from exotic bets, six and one-half per centum, plus fifty per centum of the breaks; and of totaldaily on-track pools resulting from super exotic bets, seven per centum, plus fifty per centum of the breaks. b. The provisions of this subdivision shall not apply to an association or corporation for any calendar year for which the state racing and wagering board certifies to the commissioner of taxation and finance: (i) by December fifteenth of the year immediately preceding such year, that such association or corporation has been assigned for such year, from the programs and races it requested, at least the minimum number of programs and races prescribed in paragraph a of this subdivision, or, if fewer than such number were assigned for such year, that the assignment of such lesser number was for good cause due to factors beyond the control of such association or corporation or because the board found that it would be uneconomical or impractical for such association or corporation to be assigned the prescribed number; and (ii) by January thirty-first of the year immediately subsequent to such year, that such association or corporation did conduct such number of programs and races as were certified pursuant to subparagraph (i) of this paragraph, or if it failed to conduct such number that such failure was for good cause due to factors beyond its control or because the board found it uneconomical or impractical for such association or corporation to conduct such a number. c. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (i) of paragraph b of this subdivision with respect to an association or corporation, the tax imposed by this section shall be computed by substituting the provisions of paragraph a of this subdivision for the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section and shall pay the tax so computed to the commissioner of taxation and finance. In such computation and payment, all other provisions of this section shall apply as if the provisions of this paragraph and of paragraph a of this subdivision had been incorporated in whole in paragraph a or b, whichever is applicable, of subdivision one of this section. d. For any calendar year for which the state racing and wagering board does not certify pursuant to the provisions of subparagraph (ii) of paragraph b of this subdivision with respect to an association or corporation, the tax required to be paid hereunder for such year shall be equal to the difference between the tax imposed pursuant to the provisions of paragraph a of this subdivision and the tax imposed pursuant to the provisions of paragraph a or b, whichever is applicable, of subdivision one of this section, less one-half of such difference in recognition of purses which were required to be paid, plus an additional amount equal to ten per centum of such tax in the event of a willful failure to comply with the provisions of subparagraph (ii) of paragraph b of this subdivision and such association or corporation shall pay the tax so computed to the commissioner of taxation and finance on or before March fifteenth of the following year. Notwithstanding the provisions of this subdivision, in the event that upon appeal from the determination of the state racing and wagering board that the certification provided in paragraph b of this subdivision will not be made, it is finally determined that such board was erroneous in failing to so certify and that any moneys received by the commissioner of taxation and finance under paragraph c of this subdivision were paid in error, the same shall be refunded at the rate of interest of six percent per annum. Payment of such tax due, or the anticipation of such payment, shall not affect the determination of purses in the year in which such tax arises or in the year in which such payment is made nor shall such payment in any othermanner be considered in any statutory or contractural calculation of purse obligations. e. Written notice of the certification of the board pursuant to the provisions of paragraph b of this subdivision shall be given by the board to the appplicable association or corporation by the dates therein specified. In like manner, written notice that such certification will not be made shall be given by the board to the commissioner of taxation and finance and the applicable association or corporation by such dates.
